Tag Archives: Cannington

South32 making engineering and design headway at Hermosa project

A stellar set of annual financial results has provided the ideal backdrop for South32 to update shareholders on its rapidly progressing Hermosa project in Arizona, USA.

Released late last month, the company’s 2022 financial year results showed off record earnings of $2.6 billion, record free cash flow from operations of $2.6 billion and record return on invested capital of 30.1%.

With group copper-equivalent production expected to increase by 14% in the next financial year, South32 looked to be well leveraged to in-demand metal markets at the right time.

The company has progressively been repositioning its portfolio toward metals critical for a low-carbon future, having already established a pipeline of high-quality development options. One of these high-quality development options is Hermosa.

Hermosa, which the company acquired outright back in 2018 as part of a takeover of Arizona Mining, is key to the company’s critical metals pursuit, having exposure to base and battery metals that are expected to grow in demand – both domestically in the US and internationally.

It is being designed as South32’s first ‘next generation mine’, according to Hermosa President, Pat Risner, with a series of technical reports highlighting its use of automation and technology to minimise its impact on the environment and target a carbon-neutral mining scenario in support of the group’s goal of achieving net zero operational greenhouse gas emissions by 2050.

These same reports also highlighted the potential to develop a sustainable, low-cost operation producing zinc, lead and silver from the Taylor deposit, with the bonus of possible battery-grade manganese output for rapidly growing domestic markets from the Clark deposit.

In the latest results, the company said it was devoting $290 million of growth capital expenditure in the 2023 financial year to progressing Hermosa as it invests in infrastructure to support critical path dewatering and progress study work for the Taylor Deposit. This is ahead of a planned final investment decision expected in mid-2023, which should coincide with the feasibility study.

South32 is devoting $290 million of growth capital expenditure in the 2023 financial year to progress Hermosa

Some $110 million of this was assigned to construction of a second water treatment plant (WTP2) to support orebody dewatering at the asset, alongside dewatering wells, piping systems and dewatering power infrastructure.

An additional $95 million was slated for engineering and initial construction ahead of shaft sinking at the operation, plus work to support power infrastructure and road construction.

The remaining amount was expected to support work across the broader Hermosa project, including Clark study costs and the Taylor feasibility study.

All signs from these results are that the company is laying the groundwork to develop this project ahead of that mid-2023 deadline.

In another sign of progress, South32 recently signed a “limited notice to proceed” for shaft engineering and design at Hermosa with contractor Redpath, Risner confirmed, adding that the award represented a positive step forward for the project.

“We look forward to continuing our engagement with local communities and all of our stakeholders as we make further progress with the project,” he said.

Redpath will no doubt be evaluating the technical studies that have been signed off to this point and informing future reports.

The PFS design for Taylor is a dual shaft mine which prioritises early access to higher grade mineralisation, supporting zinc-equivalent average grades of approximately 12% in the first five years of the mine plan. The proposed mining method, longhole open stoping, is similar to that used at Cannington, in Australia, and maximises productivity and enables a single stage ramp-up to the miner’s preferred development scenario of up to 4.3 Mt/y.

Yet, the Clark deposit opportunity – which has become even more tantalising with the US Government invoking the Defense Production Act and supporting the production of critical metals including manganese – could see the plan change.

The company says it may accelerate the prefeasibility study for the Clark deposit, which is spatially linked to the Taylor deposit. A scoping study has previously confirmed the potential for a separate, integrated underground mining operation producing battery-grade manganese, as well as zinc and silver from the deposit.

South32 previously said Clark has the potential to underpin a second development stage at Hermosa, with future studies to consider the opportunity to integrate its development with Taylor, potentially unlocking further operating and capital efficiencies.

With a PFS selection study expected later this year, investors and interested parties will soon know the role Clark could play in the wider Hermosa project.

What is easy to gauge already is that Hermosa is progressing on a track that many other development projects in in-demand sectors have gone down.

South32 adds Cat AD63 to Cannington underground trucking fleet

Last month, Cat dealer Hastings Deering sent out the world’s first AD63 truck to South32’s Cannington silver-lead mine in Queensland, Australia.

With a 63 t payload, the AD63 is the largest underground truck in the Cat product line, and comes with best in class speed on grade, according to Hastings Deering.

Joe Russell, South32 Cannington Vice President Operations, told IM that since taking delivery of the articulated truck from Caterpillar, via Hastings Deering, the company had started work on tailoring the vehicle to the mine’s specific requirements.

“Once the truck enters full operation, it will replace an older vehicle in our fleet,” Russell said. “The AD63 will be used in conjunction with the rest of the underground trucking fleet to move material to various locations within the South32 Cannington mine site.”

Russell highlighted the vehicle’s Euro Stage V Cat C27 diesel engine when reflecting on the recent fleet addition.

“The AD63’s engine specifications will help us to further reduce emissions, resulting in good outcomes for the environment and underground air quality,” he said.

Released in April, the AD63 features a 5% increased payload and more torque for enhanced production capabilities compared with its predecessor, the AD60, Cat says.

Additional new features enhance operator ergonomics, maintenance access and safety, and data collection for machine health monitoring, according to the OEM.

South32’s Cannington underground mine produces about 3 Mt/y of ore.

Alliance stays in the air with South32 Cannington, GEMCO contract

Alliance Aviation Services says it has entered a new airline services contract with South32, as agent for each of its Cannington and GEMCO routes.

Alliance will be the sole supplier for these services, according to the company, continuing a relationship with the mine sites that began in 2006.

The extension, from 2020-2030, was won through a competitive tender process and is testament to Alliance’s safety record, on time performance and competitiveness in the marketplace, according to the ASX-listed service provider.

Lee Schofield, Alliance’s CEO, said: “Alliance is delighted to be continuing the provision of these services for both Cannington and GEMCO mine sites from Townsville, Cairns and Brisbane. This new contract will see Alliance flying a minimum of 35 sectors per week.

“For the next 10 years Alliance will also be servicing South32’s charter requirements from Darwin. This will result in a significant increase in our permanent presence in the Northern Territory, which in turn should provide significant new opportunities for Alliance, particularly in tourism.”

GEMCO, in the Northern Territory of Australia, is an open-cut mining operation, producing high-grade manganese ore that is shipped to South32’s Tasmania manganese alloy plant and around the world.

The Cannington underground silver-lead mine, in Queensland, is made up of a 3 Mt/y underground mine and processing plant (pictured).

Telstra lays the groundwork for major underground LTE network at Cannington mine

Telstra Mining Services has announced a new partnership with South32 for a private 4G LTE network at its Cannington underground silver-lead-zinc mine in northwest Queensland, Australia.

Telstra is now in the pre-deployment stage at Cannington, with the network set to “drive improved safety, automation and mechanisation” at the site and connect staff to vehicles and sensors around the mine at all times, it said.

The underground mine produces about 3 Mt/y and the Cannington team is made up of about 550 full-time employees and up to 300 contractors.

Jeannette McGill, Head of Telstra Mining Services, said: “The high throughput and low latency offered by the system means that staff will be able to control critical equipment without interruption, and South32’s digitalisation strategy will be achievable throughout the mine.”

By adopting 4G LTE underground, the Cannington mine will be able to achieve better operating transparency, condition monitoring and production improvements for staff, machines and other mining systems, driving safety, productivity and efficiency, she added.

Telstra will be building an initial underground network 6.5 km in length using a “private, virtualised core” and LTE radio technologies distributed over leaky feeder cable using LTE-capable bi-directional amplifiers.

McGill said: “Our analysis indicates this to be the most effective solution for underground miners and is capable of adapting to the unique geology and composition of the Cannington mine. It enables access to the latest advances in 4G LTE and NB-IoT, and is also upgradeable to 5G in the future.”

The network being private means it will be a completely standalone mobile network, independent from others, like Telstra’s own public network, she explained. “South32 Cannington will have its own equipment, SIM cards and unique network codes for full autonomy and complete control.”

Providing a modern connectivity platform will allow for more flexible operations as well as scalability and choice in applying various digital solutions, according to Telstra.

“The combination of Ericsson mobile network equipment, Telstra radio spectrum, and leaky feeder solutions from specialist manufacturer METStech provides a unique capability that has made extending LTE underground a more commercially realistic and safer prospect,” McGill explained.

At its full deployment, the Cannington installation will become one of the largest underground mining LTE networks in the world using leaky feeder, according to Telstra.

“We’re excited to help drive South32’s Cannington mine further with this new private network, as it looks to pay dividends to safety, productivity and more,” McGill concluded.

South32 powers up Cannington solar PV farm

The new 7,200-panel solar farm at South32’s Cannington silver-lead mine in northwest Queensland, Australia, is up and running, the mining company confirmed.

The 6 ha, 3 MW installation is the company’s first solar installation and will help to deliver reduced greenhouse gas emissions by offsetting gas consumption with solar. Construction commenced in May.

“Electricity generated from the farm will be used to supply the operation’s accommodation village and airport with surplus power used to support mining and processing operations,” South32 said.

The project – which contributes to the objectives of the company’s Climate Change Strategy – is the second largest solar installation in a remote, off-grid mining operation in Australia and the first to be integrated into a gas-fired power station, according to the company.

Earlier this year, EDL Energy signed a 14-year extension of its contract to supply electricity for Cannington, which included partnering with SunSHIFT, a wholly-owned subsidiary of engineering and construction firm Laing O’Rourke, to ‘hybridise’ the existing 34 MW gas plant at the site, with this 3 MW solar photovoltaic installation.

It is anticipated the new solar farm will prevent between 4,000-6,000 t/y of greenhouse gas emissions.

Rob Jackson, Vice President Operations at Cannington, said the operation was committed to identifying energy efficiency initiatives. “Reducing greenhouse gas emissions is a big part of that so I’m delighted that our Cannington operation’s solar installation is leading the way,” he said.

The cost to install and operate the solar farm will be offset by lower fuel costs, according to South32. This makes it an economically viable solution for the operation.

De.mem to clean up at South32’s Cannington silver-lead mine

Water and waste water treatment company De.mem has unveiled A$350,000 ($252,364) in new orders from municipal and resource sector customers, including one from South32’s Cannington silver-lead operation in Queensland, Australia.

The sale to South32 is for a membrane-based water treatment system supplied by the company’s wholly-owned Akwa-Worx subsidiary.

Akwa-Worx designs, builds and delivers a wide range of water and waste water treatment systems that make use of modern membrane technologies. Depending on the contaminants to be removed, and the product water quality desired, these systems may use ultrafiltration, nanofiltration or reverse osmosis membranes, plus there is also a membrane bioreactor option.

Cannington has been in production for 20 years and now produces 7% of the world’s lead and 6% of the world’s silver, according to the company.